Silver Price Crash Sparks Forced Liquidations Across Metals and Crypto Markets

Silver prices plunged as much as 17% over the past 24 hours, erasing a brief two-day rebound and extending what has become one of the most volatile periods for the precious metals market in recent memory. The sharp selloff follows last week’s historic rout and highlights how fragile sentiment remains as traders struggle to identify a stable price floor. The sudden move in silver prices also dragged gold and copper lower, underscoring the interconnected nature of commodities during periods of stress.

Market participants say the selloff has been amplified by thin liquidity and heavy speculative positioning. As volatility surged, leveraged traders betting on a rebound were once again forced out of positions, creating a cascade of selling pressure. This dynamic has become a recurring theme, with short-lived rallies quickly reversing as margin calls and liquidations accelerate losses.

The turbulence is not limited to traditional commodity markets. The renewed decline in silver prices has spilled over into crypto-linked trading venues, particularly those offering tokenized commodities. On Hyperliquid, a major liquidation event tied to tokenized silver resulted in a forced close of approximately $17.75 million in XYZ:SILVER, with about $16.82 million coming from long positions, according to market data shared by traders. The imbalance highlights how bullish positioning has dominated recent flows, leaving the market vulnerable to abrupt reversals.

This pattern aligns with warnings issued earlier this week by hedge fund manager Michael Burry, who described a potential “collateral death spiral.” In his view, rising metals prices encourage leverage, but falling crypto collateral—especially bitcoin losses—can force institutions and traders to liquidate profitable metals positions to meet margin requirements. In such conditions, liquidation data can appear counterintuitive, with metals-related products inflicting more damage than bitcoin itself.

Macro uncertainty is adding to the pressure. Investors are still assessing the policy implications of Kevin Warsh’s nomination as Federal Reserve chair, while President Donald Trump has pushed back against expectations of a more hawkish Fed. Although interest rate expectations remain important for precious metals, traders say the dominant forces right now are positioning, leverage, and forced selling rather than a clean macro-driven bid.